Additional menu

eFile360.com

Where e-filing information return forms comes full circle. We support 1099, 1098, W-2, and Affordable Care Act forms.

1098

Common 1098 Filing Mistakes and How to Avoid Them

By

We’ve previously talked about Form 1098, the different types, and FAQs to help you with your filing every year. But this time, we wanted to focus on some common 1098 filing mistakes and how to avoid (or fix) them before they become a bigger or recurring problem. Need help with your 1098 filing? Contact the experts at eFile360 today! Common 1098 Filing Mistakes: Uncertainty about Reportable Points There are several confusing concepts within the 1098 filing process, as with many information returns. And one of those concepts is the who, how, and exceptions that surround reportable points for mortgage interest. A qualified person or lender of record must file Form 1098 to report all points paid in connection with the purchase of a principal residence, according to the IRS. This applies to anyone in business to collect these interest payments if the total reaches or exceeds $600 in points or other mortgage interest. Individuals and private owners who are paid for a mortgage will not need to worry about Form 1098. Several conditions must be met to create a scenario for reportable points, as well as several exceptions, all of which are outlined at this IRS link. Failing to File for an Extension If there are errors on the 1098s you send out or receive, they may result in a taxpayer’s need to file an extension. If information forms have incorrect information or errors in the calculations or other reportable amounts, it’s important to get those extension requests in sooner rather than later. It’s always better to have it and not need it than to need it and not have it, as they say. If you can’t make the April 18th deadline for 2023, or if you’re worried you won't have your corrected current tax year information returns in enough time to meet that deadline, you should start the extension process as soon as possible. The penalty for failing to file your tax return on time is 5% of your unpaid taxes for each month you are late, with a possible cumulative …

Continue Reading about Common 1098 Filing Mistakes and How to Avoid Them →

Mortgage Interest & Taxes in 2022

By

The latest version of Form 1098 is available from the IRS for tax season 2022. Get to Know Form 1098 There are seven different types of 1098 forms, but the one we wanted to talk about today is the original, the plain 1098. Form 1098 is used to help report mortgage interest. The last year or so has seen a tumultuous housing market, with home prices rising to astronomical prices due to drastic upticks in demand and inflation. Mortgage interest deductions, like those categorized and reported on form 1098, are not all-encompassing. The IRS defines mortgage interest as interest that is accrued from a loan that originates on your primary or secondary home. A mortgage interest that qualifies for deduction includes: Any interest on your home, which is defined as a property that includes sleeping, cooking, and eating facilities: house, condo, co-op, mobile home, boat, or recreational vehicle Interest on a second home that is not being rented out (there are specific guidelines for those who rent their homes seasonally and in other piecemeal situations Most mortgage insurance premiums Late payment fees Prepayment penalties Points Home equity loans and home equity lines of credit: if you took out a home equity loan to finance a remodel (a common occurrence with the rise of COVID and the work-from-home boom), you can deduct interest on the amount you used for the renovation Unfortunately, there are several things that are not deductible when you file a 1098, including mortgage interest on a third or fourth home, reverse mortgage interest, homeowners’ insurances, appraisal and notary fees, down payments, closing costs, home equity loans, and equity loan funds that were not used on the property. If you worked from home last year, you’ll have to get measurements and do some calculations because you can claim the space in your house that was used for living, but not the space you used for work (this is the opposite of a home office …

Continue Reading about Mortgage Interest & Taxes in 2022 →

FAQs About 1098s

By

There are lots of different 1098s and we wanted to help you better understand them, so we’ve put together this guide of eFile360 resources and FAQs to help you grow your understanding. 1098s: The Basics 1098s are used when you are preparing your federal income taxes, and they describe the financial transactions you or your business made during a calendar year that could affect the filing of your tax return. There are seven different types of 1098 forms: 1098, 1098-E, 1098-T, 1098-C, 1098-F, 1098-MA, and 1098-Q. The most commonly used include the 1098, 1098-T, and 1098-C. For a complete list of these forms and a description of what each form is for, you can read our eFile360 blog article on that topic. To find out which forms efile360 can help you with, check out our supported forms page! How Do I Fill Out Form 1098? When you are filling out and filing your 1098s, you want to be sure you or the tax preparer you have chosen to assist you follows the IRS instructions, which you can find here. Will I Get Two 1098 Forms if I Refinance? Generally, you should expect to receive a single 1098 form per property per year. However, if you have refinanced any of your properties within the current tax year, you will receive two 1098s to reflect the changes instituted before and after the refinance. Filing Form 1098 allows you to report and deduct mortgage insurance premiums from your taxes every year. What Are Some Reasons I Would or Wouldn’t Receive a 1098-T? The 1098-T is issued by colleges and other educational institutions and is used to report how much a student (or their parents) paid in qualified tuition and expenses during the tax year. If you pay interest on student loans, you should get a 1098-T unless any of the following are true: A course you took did not offer academic credit You are a nonresident alien Your school waived your tuition or expenses, or they were fully covered by scholarships Or an employer or government agency …

Continue Reading about FAQs About 1098s →

Types of 1098s and When to Use Them

By

There are close to 1,000 forms related to federal income taxes, and seven different types of 1098 forms. There are seven different types of 1098 forms, each with a different purpose and importance. Let’s run through each form and what they’re used for. 1098 This form is a Mortgage Interest Statement. Your mortgage company will send you this form if you paid at least $600 in mortgage interest. 1098-C This form is for Contributions of Motor Vehicles, Boats, and Airplanes. If you donated a car, boat, or airplane worth more than $500 to a charity, you can take a charitable deduction for your contribution using this form. 1098-E This form is a Student Loan Interest Statement. Your lenders must give you this form if you paid at least $600 in qualified loan interest. 1098-F This form is for Fines, Penalties, and Other Amounts. If you paid any of the following, you’ll need to include them on this 1098 form: court-ordered fines, penalties, restitution, or remediation. However, these payments are not typically tax-deductible. 1098-MA This form is for Mortgage Assistance Payments. You’ll use this form when you received or paid any homeowner assistance payments through a state Housing Finance Agency. If you meet certain requirements, you could potentially deduct those payments. 1098-Q This form is for Qualifying Longevity Annuity Contract Information. This contract is from a certain type of retirement account, and the 1098-Q is where you’d report these payouts. 1098-T This form is a tuition statement. The recipient may claim education credits if he or she paid tuition to an eligible higher education institution, like a college or university. 1098 forms are given to anyone who has been engaged in any of the abovementioned financial transactions during the tax year. When you receive these forms, it’s always a good practice to make sure all information reported – even VINs, social security numbers, etc, - is correct before you file your …

Continue Reading about Types of 1098s and When to Use Them →